Company Limited by Guarantee
A common company structure used for not-for-profit and charitable organisations in Australia that reinvest any surplus toward the organisation's purposes.
Why this structure matters for WellTogether101
Recreational, cultural, and charitable organisations commonly use this type of corporate structure. It provides legal protection for members, a clear governance framework, and meets the requirements for ACNC charitable registration — making it the right structure for WellTogether101's mission.
NFP Structure Comparison
Incorporated Association vs. Company Limited by Guarantee
| Feature | Incorporated Association | Company Limited by Guarantee |
|---|---|---|
| Governing legislation | State/Territory Associations Incorporation Act (e.g. NSW Associations Incorporation Act 2009) | Corporations Act 2001 (federal) |
| Regulator | State/Territory body (e.g. NSW Fair Trading) | ASIC (national) |
| Operates across states? | No — limited to the state of incorporation | Yes — can operate nationally |
| Can register as a charity? | Yes — via ACNC | Yes — via ACNC |
| Pays dividends? | No | No |
| Issues shares? | No | No |
| Member liability | Limited (nominal) | Limited to guaranteed amount (nominal) |
| Voting rights | Typically one vote per member | One vote per member |
| Annual reporting | To state/territory body | To ASIC (and ACNC if registered charity) |
| Common users | Small local clubs, community groups | Larger NFPs, national charities, peak bodies |
| Setup complexity | Simpler, lower cost | More complex, higher compliance |
Grant Eligibility Considerations
Key factors when applying for grants as a not-for-profit
Proof of NFP Status
Both structures must have a constitution that prevents profits from being distributed to members.
Registration Numbers
A CLG uses an ACN (Australian Company Number), while an association uses an Incorporation Number. Both will typically need an ABN.
Council-Specific Rules
Some local council grants might specify "incorporated associations," but most modern guidelines accept any "legal entity" or "incorporated not-for-profit".
Charity Status (DGR)
Organisations endorsed as DGRs are entitled to receive donations that are deductible from the donor's income tax. The ACNC registers organisations as charities; the ATO is responsible for endorsing organisations as DGRs.
Important: Not all charities are eligible for DGR endorsement.
If your organisation is endorsed as a DGR:
- Donors can claim donations as a tax deduction on their personal income tax return
- Your organisation can receive funding from philanthropic bodies and grant makers that only give to DGR-endorsed organisations
DGR-endorsed organisations will often state: "Donations over $2.00 are tax deductible."
Eligibility for DGR Endorsement
Your charity must meet the specific criteria of the DGR category it is applying for. There are 53 DGR categories under Division 30 of the Income Tax Assessment Act 1997, all administered by the ATO.
Before applying, an organisation must:
- Be registered as a charity with the ACNC (or operated by one) — except for government entities and ancillary funds
- Have an Australian Business Number (ABN)
- Fall into a DGR category
- Operate in Australia and be not-for-profit
- Have an appropriate winding up and revocation of endorsement clause in its governing documents
Depending on the DGR category, the organisation may also need to set up a public fund or a gift fund.
How to Apply
Already registered with the ACNC?
Apply directly to the ATO using the ATO's DGR application form.
Not yet registered as a charity?
Apply for both charity registration and DGR endorsement together through the ACNC charity registration application. Once submitted, the ACNC passes the relevant info to the ATO if the charity registration is successful.
Endorsement Options
Your charity can either be endorsed as a whole, or a fund, authority or institution it operates can be endorsed. If only a fund is endorsed as a DGR, only donations to that fund will be deductible.
Note: If your organisation as a whole is not eligible for DGR, certain activities may still attract DGR status through a separate fund or entity. Seek legal advice on this option.
Which Path is Right for WellTogether101?
Currently NSW-based with plans to expand in 5–10 years — two main pathways
The "Start Small" Path
Incorporated Association (IA)
The most common choice for new, local NFP groups in NSW — designed to be affordable and simple.
The "Future-Proof" Path
Company Limited by Guarantee (CLG)
Better if you expect significant growth or want to avoid the administrative hassle of changing structures later.